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Bitcoin’s price is stagnating under a wave of positive macroeconomic news, but this is a party that cannot continue indefinitely and when the global economy does come crashing down, some believe that the price of Bitcoin could soar as high as $50k.

This being said, it now becomes a matter of when this potential economic downturn will actually occur, as recent developments surrounding the US-China trade deal have shifted investor’s sentiment and may help fuel further short-term gains within the equities markets.

The Stock Market Is Flying High, But For How Much Longer?

Bitcoin’s price has so far failed to recapture July’s dizzying rally, which saw it spike to just shy of $14k, whereas the stock market’s decade long bull run continues to exceed expectations as investor confidence is bolstered by reports of an early trade deal formed between the US and China.

Experts also believe that the Fed’s decision to inject billions into the financial system following the recent repo market liquidity crisis is directly responsible for the latest stock market pump.

On the surface level, things are looking good, but Lisa Shalett, Chief Investment Officer at Morgan Stanley Wealth Management, believes that the repo money is being siphoned into financial assets rather than the real economy, which could be problematic.

“This really speaks to the idea that once again we’re on the brink of potentially being in this bubble. Where valuations are about the story and the narrative and not about the cash flow and profits. You would think we would have learned this lesson before. But here we go again.”

Also, some experts remain skeptical about reports of a trade deal between the US and China being reached. Jeffrey Gundlach, Chief Executive of DoubleLine, drew attention to China’s refusal to address intellectual property, as well as their focus on the long play, which means they are happy to drag things out until after the US elections, as two potential road blocks for a deal being closed.

As such, a more in-depth analysis of the situation shows that recent efforts between the two countries are nothing more than window dressing, adding to the threat of an imminent stock market crash and a global recession.

That being said, the question remains: where will investors move their money in the case of economic turbulence?

Bitcoin Is Superior To Gold

Clem Chambers, CEO of ADVFN, spoke in a recent interview about how mainstream news reports claim all is well within the global economy, which could be suppressing interest in Bitcoin.

“When people start thinking that it’s going to be all over soon, or there’s going to be a three part deal, and part one coming up. You’re not going to be so eager to put your Yuan into Bitcoin… And the same uncertainty equals gold,” he explained.

On that note, despite the widespread reports of a trade deal being reached, uncertainty still reigns. That being said, Chambers spoke about the alternatives in Bitcoin versus gold:

“If you’ve got to move fast, uncertainty means Bitcoin. I mean, gold, you can’t really carry much of it, it’s hard to store, it’s quite difficult to buy. You can’t just go, I’ll have some of that gold. It’s much easier to buy Bitcoin, and move Bitcoin, and protect Bitcoin than gold. So gold is at a bit of a disadvantage. And it’s old usage as the flight capital of choice is being eroded.”

As a prominent Bitcoin bull, Chambers offered a bullish price prediction for the cryptocurrency, even entertaining the possibility that BTC will one day surge as high as $1 million.

“I think Bitcoin could easily go to twenty thousand. I’m expecting it to go to fifty, I’ll be very happy if it were to go to one hundred thousand. And the one million dollar Bitcon number is purely what you get if every Satoshi is worth a dollar, no, sorry, a cent. Let me get that right. So that’s just a mathematical number,” he bullishly noted.

Having said that, Chambers was quick to point out that lofty valuations like these will take many years to come to fruition. This is partly because of what Bitcoin seeks to achieve and the forces that want to stop that from happening.

All eyes are on the macroeconomic picture as the world awaits what happens next.

Featured image from Shutterstock.

Samuel Wan , 2019-11-18 16:00:25

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NewsBlock © 2019 - 2020 All rights reserved.

NewsBlock © 2019 - 2020. All rights reserved.

While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

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Nick Chong , 2019-11-10 12:00:38

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